As we all know, Marco Polo is a legendary traveler of the
equally legendary and inaccessible Silk Road, trade routes that crisscrossed Asia almost 2,000 years ago, linking merchants in to their counterparts in China , India Arabia, and the Roman Empire. A part of this route was properly built by and China as Korakoram Highway (KKH) between Pakistan and Pakistan a part of which has been inundated due to landslides and resultant formation of China . It was such a difficult terrain that this road was rightly called as one of the wonders of the world. Hunza Lake
Marcopolo is a traveler on what Stephen King, chief economist of HSBC (HBC), has dubbed "the new Silk Road"—a 21st-century version of the trade routes that crisscrossed Asia almost 2,000 years ago, linking merchants in China to their counterparts in India, Arabia, and the Roman Empire. The new
Silk Road spans the globe, connecting companies and consumers in Latin America, the Mideast, Asia, and Africa, and generating some $2.8 trillion in trade, according to the World Trade Organization.
King says emerging markets will grow about three times faster than rich nations this year and next. "There are now massive trade connections within the emerging markets," he says. "It means in one sense the emerging world is protected from the worst ravages of the developed world." The WTO estimates intra-emerging-market trade rose, on average, by 18 percent per year from 2000 to 2008, faster than commerce grew between emerging and advanced nations.
The developed world will increasingly compete with these fast-rising countries for resources like oil and iron ore. The established multinationals will also encounter new pressure from emerging-market rivals, many of them state-supported. Yet for Western and Japanese companies that are the best in their industries, the opportunities are great. One example: Caterpillar (CAT), the world's largest maker of construction equipment, raised its full-year earnings forecast last month on higher demand in developing countries for mining, energy, and rail equipment.
and other developed countries hope to find their place on the U.S. Silk Road, the central player is . Chinese exports to the emerging world accounted for about 9.5 percent of its gross domestic product in 2008, compared with 2 percent in 1985, King figures. Last month the Saudi Railways Organization awarded a contract to China South Locomotive & Rolling Stock to supply 10 locomotives. The Mecca-Medina rail contract went to Beijing-based China Railway Group (CRWOF). Shenzhen-based Huawei Technologies, China 's top maker of phone equipment, is investing $500 million in its research center in China . China Mobile, the world's biggest phone carrier, may soon invest in Bangalore Africa.
Such trade used to be conducted in dollars and euros, even when the deals did not involve
or European companies. Today companies in emerging markets are more willing to take reals, rupees, and, above all, yuan as the U.S. Silk Road economies prosper. "If emerging-market fundamentals continue to be superior," says Kieran Curtis, who helps oversee $2 billion at Aviva Investors in , "there is the potential for serious currency appreciation against old-guard currencies." London